Nationalization as credible threat against tacit collusion

Flavio Delbono and Luca Lambertini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: Within a simple model of differentiated oligopoly, we show that tacit collusion may be prevented by the threat of nationalising a private firm coupled with the appropriate choice of the weight given to private profits in the maximand of the nationalised company. We characterise the properties of such a threat and prove that it may allow to credibly deter tacit collusion.

JEL-codes: H13 L13 L32 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (2)

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